GBP/USD lost over 0.9% on Wednesday as market sentiment weakened. A light data schedule in the UK leaves Cable traders vulnerable to upcoming NFP figures. The Fed may be more concerned about government policy than previously believed. GBP/USD dropped nearly a full percentage point on Wednesday, moving away from the 1.2500 level which is proving difficult for Pound Sterling buyers to regain. The pair tested below 1.2350 briefly, and Cable is poised for a further decline into multi-month lows.
Significant economic data is absent from the UK side, a recurring theme for the first full trading week of 2025. Cable traders will remain exposed to broad-market movements in and out of the US Dollar as traders prepare for a busy end to the week. A series of speeches from Federal Reserve (Fed) policymakers are expected on Thursday, along with Challenger Job Cuts for December, which will serve as the final preview of Nonfarm Payrolls (NFP) data before the main labor report on Friday. On Wednesday, the ADP Employment Change report indicated a slower hiring rate than anticipated for December, with a total of 122K jobs added compared to the expected 140K and November’s 146K. Additionally, ADP wage data showed its slowest growth since mid-2021. On the same day, the Federal Reserve's latest Meeting Minutes revealed that policymakers might be more cautious about President Donald Trump's proposed tariffs than previously thought. Over recent weeks, Fed officials had downplayed the potential effects of immigration and trade policies on their decisions, but the recent policy meeting included four discussions about significant shifts in U.S. policy that could profoundly affect central banking. Furthermore, the Fed reached a consensus that it was time to reduce the pace of rate cuts, emphasizing that policy uncertainty plays a crucial role in their lowered expectations for fewer rate reductions in 2025 than the market had earlier anticipated
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GBP/USD maintains position around 1.2750 amid market caution as key economic figures loomGBP/USD remains stable for the second consecutive day, trading around 1.2750 during the Asian session on Tuesday.
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